Northern Oil and Gas, Inc. Announces Purchase Price Reduction for Pending Reliance Acquisition
March 10 2021 - 7:00AM
Business Wire
Northern Oil and Gas, Inc. (NYSE American: NOG) (“Northern”)
today announced that EQT Corporation (“EQT”) and certain other
parties have exercised their preferential rights to purchase
certain properties that would have otherwise been included in
Northern’s recently announced Marcellus Shale acquisition from
Reliance Marcellus, LLC (“Reliance”). These properties, primarily
consisting of assets subject to a Joint Development Agreement
(“JDA”) with EQT, will therefore be excluded from Northern’s
pending acquisition from Reliance that is expected to close in
April 2021.
HIGHLIGHTS
- Unadjusted cash purchase price reduced by $48.6 million to
reflect excluded properties, from $175.0 million to $126.4
million
- Acquired assets reduced by approximately 2,200 net acres, or an
approximate 3% reduction
- Reduces net undeveloped inventory by only approximately 2 net
wells, or 1% of the estimated 231 net undeveloped locations
- Acquired assets expected to produce, on a full year basis, $40
– $45 million of cash flow from operations in 2021 versus $55 – $60
million prior estimate at current commodity price strip
- Capital Expenditures, on a full year basis, expected to range
from $20 – $25 million in 2021 versus $25 – $30 million prior
estimate
- Northern expects to reallocate a portion of the capital savings
into high return Ground Game opportunities, in both the Williston
and Permian Basins, with four transactions signed or closed so far
in the first quarter of 2021 totaling $11.5 million, inclusive of
D&C capital to be incurred in 2021
“We expect this change to have minimal impact to the Company’s
free cash flow profile,” commented Nick O’Grady, Chief Executive
Officer. “The exercise of this right immediately reduces our
indebtedness and boosts the returns on the acquisition. The JDA
assets represent less than 15% of the projected five-year cash
flows on the assets and only about 1% of the net inventory, despite
reducing the purchase price by approximately 28%.”
ADJUSTED 2021 GUIDANCE – RELIANCE ASSETS – FULL YEAR
2021E Guidance Ranges:
Production (MMCF per day)
75 – 85
Net Wells Added to Production
3.5 – 3.8
Total Capital Expenditures ($ in
millions)
$20 – $25
Production, Asset G&A and Marketing
Expenses (per Mcf)
$0.85 – $0.95
Average Differential to NYMEX Henry Hub
(per Mcf)
$0.55 – $0.65
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is a company with a primary strategy
of investing in non-operated minority working and mineral interests
in oil & gas properties, with a core area of focus in the
premier basins within the United States.
More information about Northern Oil and Gas, Inc. can be found
at www.NorthernOil.com.
SAFE HARBOR
This press release contains forward-looking statements regarding
future events and future results that are subject to the safe
harbors created under the Securities Act of 1933, as amended (the
“Securities Act”), and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). All statements other than statements
of historical facts included in this release regarding Northern’s
financial position, business strategy, plans and objectives of
management for future operations and industry conditions are
forward-looking statements. When used in this press release,
forward-looking statements are generally accompanied by terms or
phrases such as “estimate,” “project,” “predict,” “believe,”
“expect,” “continue,” “anticipate,” “target,” “could,” “plan,”
“intend,” “seek,” “goal,” “will,” “should,” “may” or other words
and similar expressions that convey the uncertainty of future
events or outcomes. Items contemplating or making assumptions about
actual or potential future production and sales, market size,
collaborations, and trends or operating results also constitute
such forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties, and important factors (many of which are beyond
Northern’s control) that could cause actual results to differ
materially from those set forth in the forward looking statements,
including the following: changes in crude oil and natural gas
prices; the pace of drilling and completions activity on Northern’s
properties and properties pending acquisition; Northern’s ability
to acquire additional development opportunities; potential or
pending acquisition transactions, including the acquisition of
certain non-operated natural gas assets in the Appalachian Basin
(the “Assets”) from Reliance; Northern’s ability to consummate the
acquisition of the Assets and the anticipated timing of such
consummation; the projected capital efficiency savings and other
operating efficiencies and synergies resulting from Northern’s
acquisition transactions; integration and benefits of property
acquisitions, including the acquisition of the Assets, or the
effects of such acquisitions on Northern’s cash position and levels
of indebtedness; changes in Northern’s reserves estimates or the
value thereof; disruptions to Northern’s business due to
acquisitions and other significant transactions; general economic
or industry conditions, nationally and/or in the communities in
which Northern conducts business; changes in the interest rate
environment, legislation or regulatory requirements; conditions of
the securities markets; Northern’s ability to raise or access
capital; changes in accounting principles, policies or guidelines;
financial or political instability, acts of war or terrorism, and
other economic, competitive, governmental, regulatory and technical
factors affecting Northern’s operations, products and prices; and
the COVID-19 pandemic and its related economic repercussions and
effect on the oil and natural gas industry. Additional information
concerning potential factors that could affect future financial
results is included in the section entitled “Item 1A. Risk Factors”
and other sections of Northern’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2019 and Northern’s Quarterly Report
on Form 10-Q for the fiscal quarters ended March 31, 2020, June 30,
2020 and September 30, 2020, as updated from time to time in
amendments and subsequent reports filed with the SEC, which
describe factors that could cause Northern’s actual results to
differ from those set forth in the forward looking statements.
Northern has based these forward-looking statements on its
current expectations and assumptions about future events. While
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond Northern’s control. Northern does not undertake
any duty to update or revise any forward-looking statements, except
as may be required by the federal securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210310005157/en/
Mike Kelly, CFA Chief Strategy Officer (952) 476-9800
ir@northernoil.com
Northern Oil and Gas (AMEX:NOG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Northern Oil and Gas (AMEX:NOG)
Historical Stock Chart
From Apr 2023 to Apr 2024